Worse than the Great Depression?

Economic conditions may be grim today, but you should see the parallel universe where the world failed to contain the 2008 financial crisis. In a speech Thursday, Fed chair Ben Bernanke declared that the global economy today may have been in worse shape than during the Great Depression if governments hadn't enacted the aggressive and unorthodox policies that helped turn the tide. "In the current episode, in contrast to the 1930s, policymakers around the world worked assiduously to stabilize the financial system," he said. "As a result, although the economic consequences of the financial crisis have been painfully severe, the world was spared an even worse cataclysm that could have rivaled or surpassed the Great Depression." Bernanke said his study of the Great Depression had taught him that economic growth depends on financial stability and that lawmakers must respond "forcefully, creatively, and decisively to severe financial crises."